Abstract I n this paper, we investigate the existence and the nature of real exchange rate misalignment in Organization of the Petroleum Exporting Countries (OPEC). To do this we estimated a cross country basic real exchange rate determination model for 1990-2012 and extracted historic trend of misalignment. The results imply that all OPEC countries have had misalignment -...

In a global economy, shocks occurring in one market can spill over to other markets. This paper investigates the impact of oil shocks and stock markets crashes on correlations between stock and oil markets. We test changes in correlations at different scales with non-overlapping confidence intervals based on estimated wavelet correlations. Contrary to other approaches, this method does not need...

A number of oil market experts argue that OPEC members substantially overreport their reserves. The potential damage for the world economy calls for an analysis of the motives and the preconditions for successful misreporting of natural resource reserves. Based on a signalling game within an international trade model, this article develops a framework for such an analysis. Exporting countries w...

In this paper, we investigate the relationship between carbon emissions, income, energy and total employment in selected OPEC countries for the period of 1971–2002. We mainly focus on the link between energy use and income. Employing the autoregressive distributed lag (ARDL) approach, we find that there is a cointegrating relationship between the variables in Saudi Arabia only. The long run for...

This paper examines pricing policies for OPEC under the assumption that the cartel is composed of a block of s/~e~t/~r countries with large cash needs and a t.lock of .yuI’ercountrics with little immediate need for cash and a loHcr rate of discount. The decision problem for the twopart cartel is embodied in a game-theoretic framework and the optimal bargaining solution is computed using results...

This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on investment. Uncertainty increases real option values making firms more cautious when investing or disinvesting. This is confirmed both numerically for a model with a rich mix of adjustment costs, time-varying uncertainty, and aggregation over investment decisions and time, and...